- The Australian dollar is strengthened while the US dollar weakens in the midst of concerns about economic perspectives and the decrease in business feeling.
- Federal Reserve officials highlighted a fall in both business and consumer confidence, blaming the changes in US trade policy.
- The Governor of the RBA, Bullock, described the reduction of rates as a proactive step aimed at strengthening trust and aligning with the current economic panorama.
The Australian dollar (AUD) advances against the US dollar (USD) on Wednesday, bouncing after falling more than 0.50% in the previous session. The Aud/USD pair gains ground as the US dollar extends its decline, pressed by the caution comments of Federal Reserve officials (Fed) on economic perspectives and business feeling.
Speaking at a round table organized by the Bank of the Federal Reserve of Atlanta, the president of the Fed of San Francisco, Mary C. Daly, and the president of the Fed of Cleveland, Beth Hammack, expressed increasing concerns about the US economy. Although the key economic indicators remain solid Change of feeling to US commercial policy
The Bank of the Australian Reserve (RBA), at its May policy meeting, reduced its official cash (OCR) rate at 25 basic points, from 4.1% to 3.85% – a movement widely anticipated by markets. At a press conference after the decision, the Governor of the RBA, Michele Bullock, emphasized the importance of curbing inflation and reaffirmed confidence in the central bank’s strategy. Bullock characterized the reduction of rates as a proactive measure to boost trust, adequate for current economic conditions. He also pointed out the willingness of the Board to take more measures if necessary, hinting at the possibility of future adjustments.
Political instability in Australia also weighed on the AUD. The opposition coalition fractured after the National Party retired from its alliance with the Liberal Party. Meanwhile, the Labor Party in Power capitalized agitation, returning to power with a stronger and more broad mandate.
The Australian dollar can be seen while the US dollar weakens for economic concerns
- The US dollar index (DXY), which tracks the US dollar (USD) in front of a basket of six main currencies, is losing ground for third consecutive session and quoting down around 99.90 at the time of writing.
- On Tuesday, the president of the Fed of Atlanta, Raphael Bostic, expanded the comments he made the day before. Bostic warned that inconsistent and changing tariff policies introduced during Trump administration are at risk of interrupting US commercial logistics, which depends largely on large -scale imports to meet domestic demand.
- The US dollar fights after the reduction of the US credit rating by Moody’s, from AAA to AA1. This movement is aligned with similar sales by Fitch Ratings in 2023 and Standard & Poor’s in 2011. Moody’s now projects that the US federal debt will reach around 134% of GDP by 2035, compared to 98% in 2023, with the budget deficit that is expected to be extended to almost 9% of GDP. This deterioration is attributed to the increase in debt service costs, the expansion of rights programs and the fall in tax revenues.
- The economic data published last week pointed to a slowdown in inflation, since both the Consumer Price Index (CPI) and the Production Price Index (IPP) indicated a slowdown in price pressures. This has raised the expectations that the Federal Reserve can implement additional rate cuts in 2025, contributing to greater weakness in the US dollar. In addition, the disappointing US retail sales figures have deepened concerns about a prolonged period of slow economic growth.
- The PBOC announced a reduction in its preferential loan rates (LPR) on Tuesday. The LPR at one year was reduced from 3.10% to 3.00%, while the five -year LPR was reduced from 3.60% to 3.50%.
- The National Statistics Office (NBS) on Monday reported that China’s retail sales increased 5.1% year -on -year (Yoy) in April, below the 5.5% and 5.9% prognosis in March. Industrial production grew by 6.1% year -on -year during the same period, exceeding 5.5% expected, but slowing down from the previous growth of 7.7%.
- The Australian, risk -sensitive dollar, gained support for a renewed optimism around a 90 -day commercial truce between the US and China and hopes of more commercial agreements with other countries. Meanwhile, US Treasury Secretary Scott Besent told CNN on Sunday that President Donald Trump intends to implement tariffs at previously threatened levels to commercial partners who do not participate in negotiations “in good faith.”
- According to the Australian Statistics Office (ABS), Employment increased by 89,000 in April, significantly more than the increase of 36,400 in March and well above the 20,000 forecast. Meanwhile, the unemployment rate remained unchanged by 4.1%.
The Australian dollar is maintained below 0.6450, the support appears in the nine -day EMA
The Aud/USD pair quotes around 0.6450 on Wednesday, with daily technical indicators reflecting a bullish tone. The pair continues to quote above the nine -day exponential (EMA) mobile average, while the 14 -day relative force (RSI) index remains above the neutral level of 50, both signs that support a sustained bullish impulse.
Upwards, the immediate resistance is observed at a maximum of six months of 0.6515, registered on December 2, 2024. A decisive breakdown above this barrier could pave the way for a maximum test of seven months at 0.6687, which was reached in November 2024.
The initial support is located in the nine -day EMA of 0.6426, followed by the 50 -day EMA about 0.6365. A firm movement below these levels would undermine the upward perspective in the short and medium term, possibly opening the way to the minimum of March 2020 of 0.5914.
AUD/USD: Daily graphic
Australian dollar Price today
The lower table shows the percentage of change of the Australian dollar (AUD) compared to the main currencies today. Australian dollar was the strongest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | -0.06% | -0.12% | -0.04% | -0.12% | -0.13% | -0.22% | |
| EUR | 0.04% | -0.02% | -0.11% | -0.02% | -0.06% | -0.09% | -0.18% | |
| GBP | 0.06% | 0.02% | -0.06% | 0.02% | -0.03% | -0.06% | -0.18% | |
| JPY | 0.12% | 0.11% | 0.06% | 0.08% | 0.00% | -0.01% | -0.10% | |
| CAD | 0.04% | 0.02% | -0.02% | -0.08% | -0.08% | -0.08% | -0.20% | |
| Aud | 0.12% | 0.06% | 0.03% | -0.01% | 0.08% | -0.02% | -0.11% | |
| NZD | 0.13% | 0.09% | 0.06% | 0.01% | 0.08% | 0.02% | -0.11% | |
| CHF | 0.22% | 0.18% | 0.18% | 0.10% | 0.20% | 0.11% | 0.11% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Australian dollar of the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the Aud (base)/USD (quotation).
Faqs Australian dollar
One of the most important factors for the Australian dollar (Aud) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a country rich in resources, another key factor is the price of its greatest export, iron mineral. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and commercial balance. The feeling of the market, that is, if investors are committed to more risky assets (Risk-on) or seek safe shelters (Risk-Off), it is also a factor, being the positive risk-on for the AUD.
The Australian Reserve Bank (RBA) influences the Australian dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of the interest rates of the economy as a whole. The main objective of the RBA is to maintain a stable inflation rate of 2% -3% by adjusting the interest rates or the low. Relatively high interest rates compared to other large central banks support the AU, and the opposite for the relatively low. The RBA can also use relaxation and quantitative hardening to influence credit conditions, being the first refusal for the AU and the second positive for the AUD.
China is Australia’s largest commercial partner, so the health of the Chinese economy greatly influences the value of the Australian dollar (Aud). When the Chinese economy goes well, it buys more raw materials, goods and services in Australia, which increases the demand of the AU and makes its value upload. The opposite occurs when the Chinese economy does not grow as fast as expected. Therefore, positive or negative surprises in Chinese growth data usually have a direct impact on the Australian dollar.
Iron mineral is the largest export in Australia, with 118,000 million dollars a year according to data from 2021, China being its main destination. The price of iron ore, therefore, can be a driver of the Australian dollar. Usually, if the price of iron ore rises, the Aud also does, since the aggregate demand of the currency increases. The opposite occurs when the price of low iron ore. The highest prices of the iron mineral also tend to lead to a greater probability of a positive commercial balance for Australia, which is also positive for the AUD.
The commercial balance, which is the difference between what a country earns with its exports and what it pays for its imports, is another factor that can influence the value of the Australian dollar. If Australia produces highly requested exports, its currency will gain value exclusively for the excess demand created by foreign buyers who wish to acquire their exports to what you spend on buying imports. Therefore, a positive net trade balance strengthens the AUD, with the opposite effect if the commercial balance is negative.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
